Bitcoin mining giant Cleanspark has announced a round of capital raising through the issuance of debt. Notably, the firm emulates its rivals MARA and RIOT in privately issuing convertible notes to select investors. However, the company will not be purchasing Bitcoin with these funds.
Basically, the capital raised will be injected for other purposes. This is a decision that contrasts with its rivals, which announced massive purchases of the leading cryptocurrency to incorporate it into their reserves. This strategy, promoted mainly by MicroStrategy, has the vision that the price of BTC will appreciate permanently.
In that sense, safeguarding corporate capital in other assets such as the dollar or Treasury bonds is something similar to throwing them away. Unlike these assets, companies can preserve BTC for thousands of years without it suffering any type of wear and tear related to assets composed of matter.
With this ideology in mind, the number of companies converting to the Bitcoin standard is constantly growing. However, Cleanspark does not seem to be one of them for now. The fact that the company will not buy Bitcoin does not mean that its management has no confidence in the currency. The reason is that the firm has more pressing financial matters.
Why Cleanspark won't buy Bitcoin?
The fact that Cleanspark is moving away from the Bitcoin standard is due to the fact that the capital to be raised already has a destination. According to the company, in total the mining company will raise $550 million with the issue. It is worth mentioning that the convertible notes are at 0% and mature in 2030.
Some interesting details involve the company capping the notes' prices at $24.66 per share. This represents a 100% premium over the closing price on December 12. But probably the most attractive move is that the firm could give up to 13 days to repurchase up to $100 million principal amount of the notes.
If investors take advantage of this offer, the company could raise a total of $633 million. On the other hand, the company reported that $145 million of the capital raised will be used to buy back shares from investors who participated in this fundraising.
Another portion of the funds will be used to repay its line of credit with Coinbase. The remainder will be used for capital expenditures, equipment purchases and other miscellaneous corporate expenses, according to the miner's report.
The decision that the company will not purchase additional Bitcoin for its reserves can be considered surprising, considering that its direct rivals, Marathon and Riot, also issued notes to raise approximately $500 million each and the destination of those funds is the purchase of BTC.